woensdag 21 mei 2014

Koyal Group Training Services - Morristown man pleads guilty to health insurance scam

MORRISTOWN. – A Morristown insurance broker who allegedly stole nearly $1 million while continuing to sell health care coverage he knew was fake pleaded May 14 in connection with the scheme, according to U.S. Attorney Paul J. Fishman in a news release.

David Clark, 70, of Morristown, entered his guilty plea to charges of conspiracy to commit wire fraud before U.S. District Judge Michael Shipp in Trenton federal court.

According to documents filed in this case and statements made in court Clark owned and operated Real Benefits Association, LLC (RBA), a New Jersey limited liability company he incorporated on Dec. 17, 2003, under a similar name.

Clark established RBA as a purported labor organization and as a way to market and sell health insurance to the general public through the RBA Welfare Plan. Initially, the welfare plan was fully insured through Perfect Health, a licensed New York insurance company. Participants paid insurance premiums to bank accounts of RBA and/or the Welfare Plan, which Clark then remitted to Perfect Health. 

Perfect Health was purchased by Health Insurance Programs (HIP) in 2008, and HIP discontinued its insurance policy with the RBA Welfare Plan. The federal government notified Clark that RBA did not qualify as a labor organization and was required to cease operating.

Nonetheless, Clark continued to market and sells the health insurance plans to unsuspecting participants. Eventually participants began to complain to their respective state insurance departments when their medical claims were not being paid, which prompted various departments throughout the United States to issue cease and desist orders.

Clark and conspirators continued to market and sell bogus health insurance, and from December 2008 to July 2011, they collected about $1,789,596 in premiums for RBA health insurance coverage. Clark diverted about $962,027 from the premiums paid by RBA participants for his personal use, including by using victims’ premiums to fund personal debit and credit card purchases, college tuition payments and deposits to a relative’s bank account.

The conspiracy charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Wednesday Aug. 20, 2014.

U.S. Attorney Fishman credited special agents of the US Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia; and  the U.S. Department of Labor Employee Benefits Security Administration (EBSA), under Jonathan Kay, Regional Director; as well as postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria Kelokates, with the investigation leading to the plea.

The government is represented by Assistant U.S. Attorney Michael H. Robertson of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit in Newark.

If anyone has information or think they might be a victim of this scheme, contact (866) 444-3272 to speak to an EBSA benefits advisor.

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